Investing

Why real estate is a defensive investment strategy

Kel

17 Sep 2025 — 1 min read

Real estate isn’t just about chasing the biggest returns. For most investors, it’s about preserving capital, creating consistent income, and protecting against inflation. Unlike stocks that swing every day, real estate offers stability because housing is always in demand.

Key Defensive Benefits of Real Estate

Inflation Hedge: Property values rise alongside construction costs, and rents can adjust with inflation.
Fixed-Rate Financing: Lock in a mortgage payment today while property values and rents climb over time.
Stable Cash Flow: Rental demand often grows during recessions when fewer people can buy homes.
Diversification: Real estate has a low correlation with the stock market, making it a natural hedge against volatility.
Tangible Asset: Even in uncertain markets, the property itself holds inherent value.

Defensive Real Estate Strategies in Action

House Hacking (Hybrid Approach)
Live in one unit of a duplex, triplex, or fourplex while renting out the others. Even a single-family home with extra bedrooms can work. I know a teacher who bought one fourplex a year, living in one unit and renting the rest. After a decade, he had built a solid portfolio without ever going “all in.”

Long-Term Rentals
The “boring” route works; buy, put 20–30% down, and hold. Over time, appreciation, depreciation, and steady cash flow build wealth. Some investors take on distressed properties, rehab them, and refinance, but the focus remains on stability, not speculation.

Recession-Resistant Assets
Outside of housing, sectors like self-storage, healthcare, and industrial real estate tend to stay strong even in downturns.

Defensive Doesn’t Mean Passive

Real estate isn’t a “set it and forget it” investment. It takes planning and recordkeeping. Unlike stocks, you have to:

Track expenses
Document depreciation
Maintain receipts, HUDs, and invoices to maximize tax benefits

Final Thought

Defensive real estate investing isn’t about chasing home runs. It’s about building a financial safety net that keeps paying when markets get volatile, when inflation eats into other investments, or when life slows you down.

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